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The intersection of Main Street and East Hastings Street in the Downtown Eastside in Vancouver, British Columbia, Tuesday, December 18, 2012. (Rafal Gerszak For The Globe and Mail)
The intersection of Main Street and East Hastings Street in the Downtown Eastside in Vancouver, British Columbia, Tuesday, December 18, 2012. (Rafal Gerszak For The Globe and Mail)

Commentary

Downtown Eastside eatery is a bold entrepreneurial move Add to ...

There's been a lot of ink, pixels and video spilled over the past couple of weeks about the establishment of a high-end restaurant in the Downtown Eastside of Vancouver. There have been daily protests by social activists and homeless people – and arguably people without much else to do – who taunt and verbally abuse patrons of the restaurant.

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Pidgin has been described as a “trendy new eatery” and a “chic establishment” by local media, but the Downtown Eastside is an odd place to establish this kind of restaurant. It’s world-renowned for having the poorest postal code in Canada. The landscape is replete with boarded-up buildings, squalour, poverty, intravenous drug users, sex trade workers, crackheads, meth, cocaine and heroin addicts, and the homeless, not to mention crime. It’s an urban slum and many businesses gave up on the neighbourhood decades ago.

From a local news perspective, the issue is “gentrification.” Those who live there don’t want to be pushed out. They say they won’t have anywhere else to go if the neighbourhood is gentrified. By locating a higher-end restaurant there, it’s the thin edge of the wedge that will bring other restaurants, funky furniture and clothing stores, art galleries and, God forbid, there may even be a Starbucks one day! So they demonstrate against Pidgin.

There's another angle to the story that isn’t covered nearly as well, and that’s the “business” side.

Locating a restaurant in the Downtown Eastside may be a brilliant entrepreneurial endeavour. Because of the neighborhood’s reputation it’s a bold choice for any new business, especially an upscale restaurant catering to those who don’t live in the area. But that’s what entrepreneurs do, isn’t it? They make bold decisions, and sometimes those decisions pan out.

One economic reason to locate in the Downtown Eastside is the low cost of real estate and low commercial rents in a neighbourhood that abuts trendy Gastown. In one of the most expensive cities for real estate in the world, commercial rent rates may well be low enough in the Downtown Eastside to justify the risk of a new business there. And perhaps that’s what the protesters fear the most: more entrepreneurs locating more successful businesses in a neighbourhood adjacent to downtown Vancouver.

Another business issue illustrated by Pidgin is the need for business owners to work with the local community as much as possible, thereby enhancing their corporate reputations. This is especially important when a business is locating in a non-traditional area where it might not be welcomed. The owners of Pidgin have done all the right things from a social responsibility perspective and they have worked within the community over the past year, enhancing their corporate reputation in the process. Indeed, in a statement issued by the owners on Feb. 14, they said:

“Over the course of the last seven months of building Pidgin we have supported and created a dialogue to integrate ourselves within the community. It has been our mandate since inception to introduce programs that will contribute and support the great efforts made within the DTES. We are implementing donation programs which all proceeds will go to charities that will be crowd-source picked by our patrons and residents of the DTES as well as creating food programs for residents of the DTES. Upon opening we have employed two DTES residents, local recycling, window washing, Blue Shell for linens and interior cleaning and will continue to hire within the neighbourhood wherever we can.”

But since it opened on Feb. 1, Pidgin been plagued every day and night by demonstrators loudly objecting to the location of this “trendy new eatery” in their backyard, despite the contributions to the community made by the owners. Protesters shine lights in the eyes of patrons, verbally abuse them as they enter and leave the restaurant and carry signs that say things like Eat the Rich.

On the one hand you’d think all of Pidgin’s initiatives would be welcomed, but the protesters don’t seem to want any of it, despite the fact that the restaurant has a business license, employs local workers, donates to the community and pays taxes. Say the owners:

“Despite the fact that the protesters have chosen to confront this business, we all agree, there absolutely needs to be more dignified housing and services for low income residents of the DTES, our inability to help those most in need in our society is a horrid reflection of the lack of progress by all levels of government. Rather than us being divided in our fight to help those in need, we welcome a dialogue with them and other community leaders to focus our collective strength on the real problems facing the DTES, not on a small business trying to be socially responsible.”

Notwithstanding the contributions the restaurant is making to the neighbourhood, the protesters (at heart, NIMBYists) want Pidgin to fail.

But the protests may have the opposite effect. The daily (and nightly) taunts and abuse of patrons have given Pidgin free media attention that the restaurant would otherwise not have received, arguably making it the new place to check out in Vancouver. This has led some pundits to suggest, tongue in cheek, that the owners are actually paying the protesters to continue the nightly demonstrations.

Lawyers are often involved in legal situations where clients want protests of their businesses stopped, whether that means putting pressure on a city to enforce existing bylaws, or attempting to obtain an injunction against protesters. But the Pidgin case seems to be a counter-intuitive example, where protests may actually help the business succeed.

Tony Wilson is a franchising, licensing and intellectual property lawyer at Boughton Law Corp. in Vancouver, he is an adjunct professor at Simon Fraser University (SFU), and he is the author of two books: Manage Your Online Reputation, and Buying a Franchise in Canada. His opinions do not reflect those of the Law Society of British Columbia, SFU or any other organization.

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